Outsourcing polluting processes is common in pharmaceuticals, a fact admitted by both industry and regulators. M Narayana Reddy, president of Bulk Drug Manufacturers Association (BDMA) and owner of Virchow Chemicals, says outsourcing keeps profit margins high. "We at Virchow do not outsource. My profit is a third of what others earn by outsourcing polluting processes,' he adds. Reddy says big pharmaceutical companies keep changing products, so and investing in big plants to make intermediates for one does not make sense. One area of outsourcing is solvent recovery. APPCB says recovery of solvents, used for equipment cleaning and other processes, is highly contaminating. Of every tonne of solvent recovered, 100 kg of bottom sludge is generated, which is usually dumped illegally. In July 2007, APPCB mandated 95 per cent recovery in all units.